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Immigration reform: Should flooring dealers worry?

January 21/28, 2019: Volume 34, Issue 17

By K.J. Quinn

 

Three years into the Trump administration, a series of controversial decisions made by the President were aimed at keeping America’s borders safe. However, recent immigration policy changes stand to significantly impact the foreign labor pool as legal pathways to enter and remain in the U.S. are subjected to more scrutiny than ever before.

“We’ve heard clients say they are losing patience on whether it’s worth trying to bring in the best and brightest,” said Pierre Georges Bonnefil, partner at Duane Morris, a N.Y.-based law firm. “People are wondering if the investment is really worth it, especially when you have to beat against a wall to get approvals.”

Immigration has been subject to political debate for years as Congress weighed the economic, security and humanitarian impacts. Unable to compromise on reworking immigration laws, major policy decisions were passed along to the federal executive and judicial branches. Policy directives implemented by the Trump administration in 2018 made it more difficult for U.S. employers to hire and retain foreign workers.

“One of the main targets for reform has been the H-1B program, which employers use to hire professional ‘specialty occupation’ workers, such as engineers and information technology employees,” said F. Keith Covington, a partner at Bradley Arant Boult Cummings, a North Birmingham, Ala., law firm. “At the same time, the administration has dramatically stepped up efforts to crack down on employers who use undocumented workers.”

Federal government agencies are increasing the number of I-9 (employee eligibility verification form) audits to create a culture of compliance among employers. For example, last July, U.S. Immigration and Custom Enforcement (ICE)

and Homeland Security Investigations (HSI) announced the results of a two-phase, nationwide operation in which I-9 audit notices were served to more than 5,200 businesses since January 2018 and 93 arrests were made.

“As these raids continue, employers are increasingly exposed to penalties,” noted Jeff King, World Floor Covering Association legal counsel and a partner at JKing & Associates, Delray Beach, Fla. “Recent raids have resulted in some companies announcing they were moving their facilities to Mexico.”

The flooring installation community—where dealers and contractors employ or subcontract installation crews—stands to be impacted. “It is estimated that 41% of the country’s carpet, floor and tile installers are foreign born and an estimated 15% to 20% are undocumented [workers],” King said.

Policy changes
A second significant development is withdrawal of Temporary Protected Status (TPS) for immigrants from multiple countries. TPS allows individuals to come to the U.S. because it is dangerous for them to return to their native country. “Some of the countries had been on the TPS for many years,” King said. “The withdrawal of TPS status requires immigrants who are in the U.S on TPS to leave the country.”

In October, a federal judge in California put a hold on the administration’s plans to terminate TPS for approximately 300,000 people living in the U.S. from El Salvador, Haiti, Nicaragua and Sudan until the courts issue a final resolution in the case Ramos v. Nielsen as to whether the Trump administration violated the law in ending TPS for these countries, according to published reports.

While the decision provides a brief reprieve for people with temporary work visas, employers who sponsor workers for work visas and green cards—an estimated 7 million people apply annually—face another hurdle from the administration’s recent reforms. “Changes to procedures, such as requiring employment-based green card applicants to go through a new interview stage, have created meaningful, substantive hurdles for employers wishing to sponsor talented foreign professionals,” said Sandra Feist, an immigration attorney at Grell Feist in Minneapolis. “Administrative processes have also been undermined.”

A new policy implemented last September, for example, allows U.S. Citizenship and Immigration Services (UCIS) officers to reject visa or green card applications that are missing evidence or containing an error. Previously, officers were required to send notices—called a request for evidence (RFE)—that provided applicants an opportunity to make corrections rather than closing the process, according to published reports.

According to the UCIS, the agency’s policy change is part of an ongoing effort to, among other things, execute and protect the integrity of its laws and reduce frivolous applications. “UCIS will continue adjudicating all petitions, applications and requests fairly, efficiently and effectively on a case-by-case basis to determine if they meet all standards required under applicable law, policies and regulations,” said Michael Bars, a UCIS spokesman.

Immigration attorneys contacted by FCNews said UCIS officers now have more discretion to deny cases without first requesting more information. “Additionally, individuals whose cases are denied may be put into removal proceedings, if the denial causes them to lose status,” said David Jones, an immigration attorney at Fisher & Phillips, Memphis, Tenn.

If applicants are not given a chance to submit requisite evidence to avoid being denied, it could add months or years of additional paperwork and thousands of dollars in legal fees. “It’s almost zero tolerance,” Duane Morris’ Bonnefil said. “We used to get requests for evidence [notices] and now, instead of receiving them, we’re receiving denials.”

UCIS reported there are numerous factors that can lead to fluctuations in RFE and denial rates, including the quality of the petitions being adjudicated. “Officers evaluate a petition and request further evidence and issue subsequent denials when the preponderance standard has not been met,” Bars said.

Impact on foreign labor pool
There is speculation among immigration attorneys that the policy changes will do more harm than good, as it could take a significant number of lawful foreign workers out of the labor pool. “Employees who should be able to expect no issues with their stay in the U.S. may suddenly find themselves in removal proceedings,” Fisher & Phillips’ Jones said. “Also, employers can expect to see continued increases in I-9 audits and raids.”

The result could mean a large portion of the world’s labor force takes their talents elsewhere. One need look no further than the estimating, sales and project management side of the flooring industry, particularly in markets that have a high number of technology/research centers, where there was a loss of talent from the Middle Eastern and Asian immigrant populations, according to Starnet Worldwide. “Because home visits to quite a few countries can lead to restrictions when attempting to return to the U.S., we are losing American-educated legal immigrants to Canada, where ease of movement for global families is possible,” said Jeanne Matson, president and CEO of the network of flooring contractors.

Olga Robertson, president of FCA Network, a retail group, said members do not seem too concerned about any U.S. immigration policy reforms. “My dealers will not intentionally hire an illegal [worker],” Robertson said. “I don’t know if the newest policies will limit legal migration of skilled and unskilled workers.”

A shakeout of foreign-born installers could exacerbate the existing labor shortage, a profession that saw its numbers dwindle following the 2007 recession. There are other potential impacts to the installation community as well. “We are concerned that, without the highly productive immigrant option, we will see tremendous pricing escalation as the market tightens—especially in urban markets that are so highly dependent on immigrant labor,” Matson explained.

Employer risks for non-compliance
Inspections are one of the most powerful tools the federal government uses to ensure businesses are complying with U.S. employment laws. “One of the best steps an employer can take is to conduct an internal audit to make sure its Form I-9s are in order,” Bradley Arant Boult Cummings’ Covington said. “This gives the employer an opportunity to take corrective measures, if necessary, before ICE shows up.”

After receiving a notice of inspection, employers are required to produce their company’s I-9s within three business days, after which time ICE may conduct an inspection for compliance, according to the agency. “It is most important to have an ethos of compliance and to take proactive steps to ensure that your workforce is authorized and will remain so,” Feist said. “Proactively addressing long-term needs, and the big picture of foreign employees’ work authorization, has never been more important.”

Flooring dealers and contractors who subcontract labor to handle their installations could also be at risk. “Companies should ensure their agreements with contractors mandate that contractors comply with immigration laws and indemnify the company where failures may impact the company,” Fisher & Phillips’ Jones said.

If employers are not in compliance, an I-9 inspection of their business will likely result in steep civil fines and could lay the groundwork for criminal prosecution if they knowingly violate the law. Even if an employer does not have any undocumented workers, ICE can levy fines if documentation is not in order. “The environment right now is more hostile toward employers of foreign workers than it has ever been, and it is therefore extremely important to proactively audit your own protocols and paperwork,” Feist said.